WHILE most of Jersey’s finance sector has been celebrating the 60th anniversary of the industry, one important player is even older than that.
Midland Bank Trust, a pioneer in the crucial trusts sector, is marking 75 years in the Island. Now called HSBC Trust and Fiduciary Services, and part of the sixth-largest bank in the world, the trust specialist celebrated the occasion by supporting a key community research initiative looking at the philanthropic needs of the local community.
The Jersey Community Foundation’s Local Needs Assessment Report is being undertaken by PwC, with an evidence-based approach to grant-making and helping a compelling case to develop and channel local philanthropy towards local issues. HSBC TFS is one of the co-sponsors of the report, which is due to be published later this year.
Philanthropy has been a recent growth area for HSBC TFS, which was launched as part of Midland Bank on 21 June 1947.
Today, HSBC TFS is an integral part of HSBC Global Private Banking, providing a range of wealth planning, philanthropy and family governance services, managing around US$90 billion of assets in 1,000 structures for a global client base. The business employs nearly 70 people in Jersey and 220 globally, including accountants, lawyers and qualified trust specialists, providing international services from the Island.
Supporting the new research underlines the strong affiliation the bank’s clients have with philanthropy and charitable giving, according to Chris Jones, managing director of HSBC TFS in the Channel Islands and the Isle of Man. This will also provide an opportunity to highlight areas needing support within the Island where the business is based.
‘We have been helping clients with their family wealth and legacy plans for three-quarters of a century,’ he said.
‘Increasingly, that has incorporated philanthropy and charitable giving. The aims of this piece of work from the Jersey Community Foundation are fixed firmly on the future of our island community and, at a time when we are celebrating the past 75 years of our business here, we are equally focused on looking ahead – to working with future generations to empower them to realise their long-term ambitions and play their part in positively impacting the local community.’
Chris, who moved from Hong Kong to take up the top trust job in Jersey, said his business was very much part of HSBC’s private banking strategy in developing relationships with ultra-high-net-worth clients globally. He said that the trust business was seen very much ‘as a differentiator and something that most other banks were not able to provide’.
‘Ordinarily, most of our clients would look at investments and the bank is well set up across a range of investments. Clients get interested in us as what really matters to them often are issues around succession and what happens if something happens to them and how do they best cater for their family,’ he said.
To provide this type of succession planning service, HSBC has four major centres in Jersey, Hong Kong, Singapore and the US, which offer clients a choice of jurisdiction, regulations and the availability of individuals who can connect them with the rest of the bank.
‘One of the main reasons I came to Jersey was to increase that connectivity and work with the team here to help. More than 90% of our clients are “group connected”, which means they have relationships with the private bank or the commercial bank, so it very much forms part of the full-service offering the bank has,’ Chris explained.
‘The fact that it is our 75th anniversary, I think, is really important for our clients. What stands out for me when I meet clients is that they’re often looking for a partner to work with their family over the long term. It tends to give substance when they ask how long you have been doing this business. I would rather say 75 years than 75 days or 75 months. It puts a lot of credence behind what we’re saying.’
The business is also well known in the Island for how it operates, the types of business it wishes to do and, importantly, how it wishes to conduct itself.
‘I think clearly the community here is important. And I think one thing that we’re looking to do more of within this business here is to increase our profile appropriately,’ Chris said.
‘One of the key challenges for all businesses across the Island is to attract some of the top talent and, to do that, we need to be able to get the message out there about how we do things, what we stand for and so forth.’
Over the past 75 years, laws and regulations have fundamentally changed, but the business is still about personal service and trust, in all senses of the term.
‘Trusts have been around for hundreds of years, but what has probably changed has been in line with the group strategy of seeing where the opportunities are, and so this is now very much a globally connected business,’ he said.
‘Seventy-five years ago, this wouldn’t have been the starting point for the business and, from that perspective, we’ve moved on strategically as the world has moved on. A lot of our clients are globally connected families who do not tend to live in one jurisdiction or have business interests in just one jurisdiction. But the principles of what we do are basically the same, and we are here to ensure that the assets are looked after for the family. That is the core of our thinking and the core of what we do on a day-to-day basis.’
Chris declined to predict what the business would look like in 75 years, or even 40 years, but said that people would still have assets and businesses, and they would still have families and would pass on so there was always going to be a need for their services. They will have to adapt to different product offerings, as they are doing already under a trust law that has been in place for 40 years.
‘When I’m meeting with clients and families, it’s one of the things that stands us in very good stead. It’s important that, after 75 years, clients know that we will be here, and we’ve got a governing law that’s been around for the best part of 40 years and with judgments and precedents to refer to, and that’s important.
‘Clients know that the world has become a lot more complex and different jurisdictions have got different requirements. As a result, they are getting good advice from reputable law firms and often those law firms and other advisers in different jurisdictions point to Jersey as somewhere to choose if you want that integrity for the structure and something that’s sustainable. Jersey is a very good home for that, and you only have to walk down the street and see the names that we have in the Island. It’s difficult to match that in other jurisdictions,’ he continued.
‘Looking forward, we are getting busier and more popular as a jurisdiction. Therefore, one of the challenges I see is being able to cope with that demand and keep up with the quality and, ultimately, we still require people to do that.’
Even new technology may not be enough as some clients do not want to interact digitally and, although productivity is the key, the business is not looking at the use of AI and robots.
‘This business is not about that. It is about families and about important, quite delicate issues which are often complex,’ Chris said.
Tax is not the main consideration either, although clients will always seek advice to ensure they are doing the right thing. But the vast majority of the bank’s client base is looking at succession planning issues and how to deal with the financial assets they already have. Chris said that common reporting standards had also helped to create ‘quite’ a level playing field for jurisdictions.
As clients are now also focusing more on philanthropy, it is important, said Chris, for the Island to have a charities law and a charities commission with a dedicated commissioner. This approach also made it appropriate, he added, for the bank to mark the anniversary by helping the Jersey Community Foundation’s research project, something which JCF’s chief executive Anna Terry welcomed.
‘This is a really important piece of work, and I’m delighted that HSBC Trust and Fiduciary Services have committed to supporting it,’ she said.
‘Local needs assessments are appraisals that evaluate a community to identify the requirements of the area and to determine appropriate projects that would translate into social value.
‘As we now rebuild following the pandemic, the findings of this assessment will be timely, helping to inform how funding bodies prioritise their resources, shape funding strategies and highlight areas of the local community that are most in need of help.’
Emma Bunnell, chief executive and head of wealth and personal banking at HSBC Channel Islands and Isle of Man, said they were delighted that their trust business supported an initiative promoting long-term change in the community.
‘Our ambition across the Channel Islands and Isle of Man is to open up a world of opportunities for our island and international clients, to help structure, protect, manage and grow their wealth,’ she said. ‘Increasingly, clients recognise that their wealth is not measured purely by its monetary value today and tomorrow, but by the positive change that it can make in the world, and that is an approach that we share as a bank too.’